KTEK Systems Aims for ASX Listing Amid Global UAV Surge

KTEK Systems Pty Ltd, a specialist supplier of airframes and electromechanical assemblies for military-grade drones, is preparing to list on the ASX as geopolitical tensions and technological shifts continue to fuel unprecedented growth in the global unmanned aerial vehicle (UAV) market.

With operations spanning Australia, Israel, Portugal, the Netherlands and planned soon the USA, KTEK positions itself as a Tier-2 supplier to Tier-1 defence primes, leveraging an asset-light manufacturing model to produce mission-critical components for next-generation UAV platforms. The IPO will seek to raise between $6 million and $7.5 million, with a post-money market capitalisation of up to approximately $23.5 million.

A Scalable Model for a Rapidly Expanding Market

Founded in 2019 by CEO Dekel Keisar, a mechanical engineer and former IDF Major, KTEK has developed a distributed manufacturing model it calls the “Cordless Factory”. By outsourcing physical production to certified aerospace manufacturing partners, while retaining in-house control of engineering, quality assurance, and logistics, KTEK delivers complex sub-systems without the overhead typically associated with defence manufacturing.

The company focuses on full-turnkey (FTK) delivery of electromechanical UAV assemblies - ranging from composite airframes and control surfaces to avionics trays, power distribution modules, landing gear mechanisms, and military-spec ground systems.

All products are built to stringent aerospace and military standards, including AS9100-aligned quality management systems.

This modular, scalable approach is designed to support multiple concurrent projects while maintaining engineering rigour and compliance, allowing the company to respond rapidly to demand across multiple jurisdictions.

Exposure to Tier-1 Defence Programs

KTEK’s customer base includes global defence contractors such as UVision and Elbit Systems - both of which have secured significant UAV-related contracts in recent quarters. In particular, a largeUAV customer recently won a circa US$1billion contract, for which KTEK supplies key airframe components and integrated sub-systems.

While revenue attribution is indirect, KTEK is expected to benefit materially from this contract, given its ongoing role as a manufacturing partner. The company is also engaged across several other customers, including maritime surveillance UAVs, multi-domain ISR packages, and anti-drone solutions awarded in both European and Israeli markets.

In total, KTEK customers have secured over A$2.5 billion in drone-related contracts since 2023, providing a strong pipeline of ongoing and future production opportunities.

Financial Performance and IPO Structure

KTEK reports revenue of A$5.5 million for the 2025 financial year, with a customer order book valued at A$9.2 million to be fulfilled by the second half of 2026. The company claims a compound annual growth rate exceeding 100% since 2023.

As part of its IPO, KTEK Australia will acquire its Israeli operations, consolidating both entities under the ASX-listed parent. The capital raising will take place at an enterprise value of approximately $16 million, with shares issued at a price supporting a total market capitalisation of between $22 million and $23.5 million, depending on the final amount raised.

A pre-IPO convertible note of $1.5 million has already been executed, converting at the greater of 10 cents or a 50% discount to the IPO price.

CPS Capital’s Nathan Barbarich is acting as Corporate Adviser and Lead Manager to the IPO.

Industry Context: UAVs and Global Defence Spending

The timing of KTEK’s listing coincides with a period of extraordinary growth in the military UAV sector. The global market for defence drones is forecast to grow at a compound annual rate of 17.3% through 2030, underpinned by increased military modernisation, geopolitical volatility, and the evolving nature of warfare.

UAVs now play a central role not only in reconnaissance but also in direct kinetic operations, particularly through loitering munitions and autonomous strike platforms. Conflicts such as the Ukraine war have demonstrated the tactical efficiency and cost advantages of drone deployments, reshaping defence strategies globally.

Total global defence expenditure reached US$2.72 trillion in 2024, with all NATO members expected to meet the 2% GDP spending target by 2025 and a collective goal of 5% by 2035 recently proposed. The United States alone is forecast to exceed US$1 trillion in defence spending by FY2026.

Within this environment, demand for UAVs, counter-drone systems, and supporting infrastructure continues to grow rapidly. KTEK’s positioning as a supplier of high-complexity sub-systems offers leveraged exposure to these procurement cycles without the development or regulatory burden of full-platform manufacturing.

Governance and Board Composition

The company is chaired by Howard Digby, a former regional managing director of The Economist Group and senior executive at IBM and Adobe. He is currently a non-executive director at Elsight (ASX:ELS), which develops secure communication technology for defence and mobility applications.

Non-executive director Winton Willesee brings over 25 years of capital markets experience and previously served on the board of Droneshield (ASX:DRO), a listed counter-drone technology firm. The board's experience spans aerospace engineering, capital markets, and corporate governance, providing a strong foundation for the proposed listing.

Risks and Outlook

As with many Tier-2 defence suppliers, KTEK’s financial outcomes are closely linked to the success and continuity of its key customers. While the company benefits from long development and integration cycles that support supplier retention, its revenues are ultimately derivative of program allocations by prime contractors.

Execution risk, geopolitical factors, regulatory requirements, and technology shifts also represent ongoing challenges. Nonetheless, KTEK’s demonstrated capability, established customer relationships, and scalable production model position it well to participate in the structural growth of the global UAV industry.

For investors seeking targeted exposure to the high-growth defence drone sector—particularly in military sub-systems and dual-use applications—KTEK offers a direct channel at a relatively early stage of commercial scaling.